We often hear the question, “Which departments should exist in a mid-tier eCommerce retail company?” The answer truly depends on size, industry, and product type. However, there are standard ecommerce departments that apply to most eCommerce businesses, and I will outline those basics here.
When setting up Linnworks warehouse management system, many people benefit from identifying common ecommerce departments within their business if they have not already done so. This facilitates effective workflow and communication among and within departments. Having information in different silos is very expensive and counterproductive to any business. Let’s minimize that now.
The critical duties each ecommerce department performs are part of the process that an order would follow. Whether the sale is from eBay, Amazon, your website (Magento, Shopify, Bigcommerce, Volusion etc.) or a wholesale order, all orders, in general, will follow the same workflow.
Product and sales order workflow in an ecommerce company
- Merchandising/Channels management
- Customer Service
- Packing/Shipping/Quality Control (QC)
Warehouse ecommerce departments
- Quality Control (QC)
Front office ecommerce departments
- Channels Management
- Customer Service
Let’s take a quick look at the main job function of each of these.
Purchasing is the first step in the life cycle of an actual item in relation to the company. Many times a purchasing agent will be in the same department as merchandising. The logic here is that if you are knowledgeable enough to purchase an item, then you should know what you can and should sell it for. Otherwise, how do you know it is a good buy? The purchasing agent is responsible for researching and identifying the “best buys” to optimize ROI from the capital allotted to them.
Receiving encompasses all of the steps required to get a new product shipment in the door, organized, counted against the purchase order, and then get it stocked. Sometimes the employees doing the stocking are different from the employees doing the receiving, and this is in order to streamline and have role specialties.
Merchandising and listing
Merchandising & Listing are often combined. This is because the person merchandising (determining the price, keywords, competition etc.) possesses knowledge about the product, and often times it makes sense to have them list as well. The alternative is to have a separate person doing the listing, someone other than the merchandiser. This route is great as long as there is successful knowledge transfer about key details that must be known to do a great listing. Something to note is that many companies will also have Channel Management experts. Sometimes this is the same group of employees as in merchandising and/or listing. However, I believe once a company hits a certain sales volume it is justified to have Channel Management experts as their own roles.
The Channel Management expert’s role is to maximize sales on a given sales channel or on multiple channels. For instance, you could have an Amazon channel manager who is paid some kind of incentive on year over year sales growth – always do sales growth, not just sales! This means that that specific channel will have a dedicated person making sure it is living up to its potential. Many times we see companies add channel after channel (it is expensive to add channels with the setup costs) but then not properly care for and manage the channel. Doing this leaves a ton of potential revenue on the table. Make someone accountable, and let them spend the time to become an expert that can truly boost sales and add value.
Customer Service is the face of the company. It is the interaction customers have and the impression by which they will remember you. Customer service is responsible for answering and resolving all inquiries from customers and potential customers. The employees in this department manage refunds, exchanges and sales assistance. They can turn unhappy customers into superfans if given the power to do so. Customer service reps must have enough power to make decisions on the fly to resolve issues. Many times a return can be flipped to an exchange if your team is properly trained. Customer service becomes even more important in ecommerce since there is no store for customers to enter. If the level of service given can exceed customer expectations, then you have likely set the stage for a return customer, and we all know those are the best!
Picking (Warehouse) is the department responsible for taking the picklist or pick session (if you are using SkuVault Core Interactive Wave Picking) and physically picking the items necessary to fulfill the orders. These items are then taken to shipping stations. Keeping this step efficient is a must. Inefficient pick routes not only cost a lot in labor but also slow down your fulfillment process which, in today’s economy, can make or break a company.
You have to ship it fast to stay in the competition. Most businesses today have moved to the model of placing product everywhere in the warehouse and relying on their system to tell them where to get items when they are needed. This is the model we recommend and it is used by the likes of Amazon in its fulfillment centers. It eliminates a ton (yes, that is the technical term) of unnecessary costs such as physical inventory re-allocation.
Packing, quality control, and shipping
Packing, Quality Control, and Shipping can have many workflows but, with any combination, the basics are the same, and the items are quality controlled against an order to ensure accuracy and product quality. This must be tracked by who did the QC. The items are then packed and a shipping label is applied, which also allows for the sales order to be marked as ‘shipped’ in the respective systems.
To clarify, QC, pack, and ship all happen in order but may be carried out by one or multiple employees/sub-departments. Ideally, the majority of this is automated. A successful OMS or WMS will allow for a speedy and automated way for employees to QC and track the history. Printing the shipping label should be prompted with a simple scan as well. Barcode scanning is essential for efficiency and accuracy in the warehouse. With or without software, these steps are crucial and the process should be carefully outlined and defined.
As mentioned earlier, these are just some basic ecommerce departments that exist within most all ecommerce businesses in some form or fashion.
In addition, there are basic business functions that exist, such as bookkeeping/accounting, IT, and other supporting roles. I am very much of the opinion that it is beneficial to “specialize” as you grow. In doing so you end up creating sub-departments within your departments. I love connecting with similar business owners to hear their stories and gain insight as well as connecting with vendors and partners that can offer great advice.
No matter how you end up breaking down your departments, just remember that if employees do not understand what their exact roles and duties are, then it is likely they will not be able to succeed and become rock stars within your organization.